4. Suppose the aggregate demand and supply schedules for a hypothetical economy are as shown below. Amount of real domestic output demanded, billions $ 200 400 600 800 1000 Price level (price index) 300 250 200 150 100 Amount real domestic output supplied, billions $800 800 600 400 200 of A, What will be the equilibrium price and output level in this hypothetical economy? B. Why won't the 150 index be the equilibrium price level? Why won't the 250 index be the equilibrium price level? C. Suppose demand increases by $400 billion at each price level. What will be the new equilibrium price and output levels? D. What factors might cause a change in aggregate demand?

4. Suppose the aggregate demand and supply schedules for a hypothetical economy are as shown below. Amount of real domestic output demanded, billions $ 200 400 600 800 1000 Price level (price index) 300 250 200 150 100 Amount real domestic output supplied, billions $800 800 600 400 200 of A, What will be the equilibrium price and output level in this hypothetical economy? B. Why won't the 150 index be the equilibrium price level? Why won't the 250 index be the equilibrium price level? C. Suppose demand increases by $400 billion at each price level. What will be the new equilibrium price and output levels? D. What factors might cause a change in aggregate demand?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 11PA

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